Archive for Retirement

7 New Year’s Resolutions For A Richer 2017

New Year, New You!

fireworks

Photo Credit: http://ow.ly/44VN30j5jgg

The New Year is a great time of renewal. That makes it a good time to make bold, decisive changes in your life. Leave behind the baggage that was 2016 and start fresh with a blank slate in 2017. If you’re looking for some resolutions to improve your personal finances, we’re pleased to offer seven ways to make 2017 the year of the dollar!

 

1.) Track your spending

Determine where your money goes. Carefully record every dollar you spend for a month; apps like Mint can make this process automatic. Keeping track of where your money ends up may ultimately encourage you to spend more judiciously.
 

2.) Make a budget

70% of Americans live financially spontaneous lives, without planned spending. This is a circular problem: If your budget doesn’t include setting aside money for long-term expenses and savings, you’ll end up spending everything on unplanned things and events. Stop the cycle by creating a budget that modifies your spending to be more in line with your priorities.
 

3.) Get out of debt

The biggest stumbling block to financial security and saving towards long-term goals is debt. Make the move towards debt reduction this year by adding an extra $50 or $100 to your credit card payments. Alternatively, focus all your payment resources on the highest-interest debt until it’s paid off, then move on to the next highest.
 

4.) Start an emergency fund

The best way to avoid going into debt is to have some money available to handle the occasional, yet inevitable, emergency. Set a specific goal, like adding $10 per month to a savings account. At the end of the year, you’ll have more than $100 available in case something goes wrong.
 

5.) Start a retirement account

When you have a retirement account, your monthly statements serve as reminders to think about and plan for your retirement. The challenge, though, is taking that first step. Don’t get hung-up on perfection; any kind of retirement account is better than none. If your job offers a 401(k) matching program, sign up to get at least the full matching funds amount – it’s free money. Do a bit of research, then open the account that seems like the best idea.
 

6.) Automate your savings

Fighting that impulse to spend what you’ve earmarked for savings is a constant struggle; it’s easiest to take the decision out of your hands. Change your direct deposit to put some of your paycheck directly into a savings account, where you won’t even think about spend it impulsively.
 

7.) Get educated

Knowledge is power, and that’s especially true in the world of personal finance. There’s loads of information out there; resolve to read one personal-finance article a week. This will give you great ideas for improving your financial situation.

Happy New Year from all of us at 705 Federal Credit Union. We hope you have a safe, happy, and prosperous 2017!

For more tips and tricks like this, connect with us on Facebook, Twitter, Instagram, or YouTube!

SOURCES:

How Boomers Can Retire The Way Millennials Work

Retire Smarter, Not Harder!beach

You may have noticed a surge in the number of ponytails and slightly exposed tattoos around the workplace water cooler. Or perhaps you find you now need to get to the office earlier if you plan to land a space for locking up your bike. Maybe you’ve had to make peace with the fact that the kid in your meetings who doesn’t look old enough to ride solo on a roller coaster is not an intern, but an actual employee!  Face it, millennials are a force in the American labor force. In fact, by 2020, they’ll represent more than half of all workers in the country.  In spite of what you’ve read, those pesky youths can actually teach us experienced folks some important lessons about money, some of which might make you rethink part of your retirement planning.  Here are some of the things they’ve figured out that the rest of us might want to consider:

1.)  Don’t be afraid to move.  USA Today recently reported that one-third of all employees in America are freelance, by-the-job workers.  In many cases, these jobs are being handled by young people, many of whom commute over Wi-Fi from home or a coffee shop, instead of 45 minutes of bumper-to-bumper on I-10.  In fact, many of those young people would need an airplane ticket to come into the office.  An increasing number of young people live a “digital nomad” lifestyle, living in the cheapest cities and working wherever they feel most inclined.  It’s easier to make ends meet living in San Antonio, where the median home price is $150,000, than it is in San Francisco, with a median home price six times as high.

The same logic works for retirement.  There’s no reason to keep living in a pricey neighborhood just because it’s a convenient drive to the office you’re not visiting any longer.  In fact, many retirees are following the digital nomads abroad, retiring to Asia and Central America, where the cost of living is pennies on the dollar.  In Belize, for example, a couple can retire with a budget of around $13,000 per year.  That’s below the poverty line in the United States!  How many flights could you buy for the grand-kids with that kind of savings?  Would they love to visit you on the beach?  You bet they would!

If you think you might want to move, check out our mortgage here, because even a fraction of your home value here could buy you property abroad.

2.) Know what to rent … know what to buy.   It used to be that every young person’s living room looked the same:  futon from the curb, coffee table from Ikea and an enormous corner bookshelf filled to the brim with DVDs.  Before that, the DVDs were LPs, the coffee table was a spool table and that futon was probably the same futon from the same curb, just 20 years earlier.  But if you ask millennials how many DVDs or albums they own, they’ll respond with a confused look.  Why would anyone own movies or music?  Paying $20 for one movie or album doesn’t make sense when you can get all of Netflix for $8 per month or Spotify for free.

The same is true for a lot of the things you might want in retirement.  Is it time to replace that car?  Why not lease it?  Do you want to own that house forever?  Why not create a leaseback arrangement?  Do you own a timeshare?  Sell it and put the proceeds into a high-yield money market account.  It’ll go a long way toward paying for your vacations, wherever you choose to go.

Check our vehicle lease rates. Or drop us a line, and let us walk you through your budget to see what you may consider selling or renting, instead of owning for the sake of ownership.

3.)  Get connected.  Young people can do just about everything through social media, even when they’re otherwise not technologically inclined.  I recently had a millennial ask me what use anyone could possibly have for Excel, which was stunning by itself, but then she proceeded to arrange a meeting over Instagram on her phone at the drop of a hat and on a Saturday afternoon, which was even more shocking.

Make your social media work for you.  Go through the social media apps on your phone, see what you use them for and why you have so many.  Then ask young people why they have apps you don’t.  Do those apps sound useful?  If so, get them.  If not, try them out anyway.  While you’re at it, follow the businesses you use most often, so you can find news and deals.  It’s better than email, faster and easier to interact.

Most importantly, if you’re not following us on Twitter and Facebook, now’s the time.  We put out a lot of great info to help you with your finances, and you can shoot us a question. With just a couple of clicks, you can see the questions other people have.  You might even learn the answer to a question you didn’t even know you needed to ask!

Sources:

http://www.forbes.com/sites/kenrapoza/2013/02/18/one-in-five-americans-work-from-home-numbers-seen-rising-over-60/
http://money.cnn.com/2015/08/13/retirement/retirement-income-plan/index.html
http://money.cnn.com/2015/09/03/pf/gig-economy-free-agents/index.html
http://www.usatoday.com/story/money/personalfinance/2015/09/04/credit-dotcom-financial-checklist/32349553/
http://www.bestplaces.net/city/texas/san_antonio
http://money.usnews.com/money/blogs/on-retirement/2014/04/16/the-worlds-9-most-affordable-places-to-retire